How good is the insurance in your super?

Many Australians working in the trades industry believe that they have sufficient insurance cover within their super fund. Generally that is not the case, but forgetting amount the amount of cover for a moment, let's look at the actual cover.

Given that the majority of tradies work in the construction industry, it should come as no surprise that many tradesmen have their superannuation with CBUS.

CBUS is a very large and well trusted super fund, and if you have your insurance with them, you'd probably feel pretty safe, wouldn't you?

But guess what? If you have your insurance through your CBUS super fund, the insurance is not actually with CBUS.

Have you ever heard of a company called Hanover Life Re? Of course you haven't - but that's who CBUS have outsourced your insurance to.

Hanover Life Re is a company based in Germany, and although I'm not suggesting for moment that Hanover are not a decent insurance company, they wouldn't be my first choice.

If I was laid up in a hospital bed trying to sort out my income protection claim, or worse, my wife was having to sort out my life insurance claim after my death, I certainly wouldn't want to be dealing with some German company that I'd never heard of.

I always prefer to deal with big Australian insurance companies. These are all household names here in Australia, and they have a lot to lose if they start appearing on Today Tonight and A Current Affair for knocking back fair claims or making life difficult for their clients.

Who would you rather deal with? A German company that you've never heard of, or a household name Australian insurer? The answer for me is very easy.

It's not just CBUS who use unknown overseas insurers. Most industry funds in Australia outsource their member's insurance, and in some cases they will be companies that you have never heard of, and that are far from being Australian.

It is certainly something to think about next time you are reviewing your income protection and life insurance.

Information on this website should be seen as general advice only, as it does not take into account your personal circumstances. You should not act upon any information on this website without first consulting a qualified financial adviser or insurance broker
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